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U.S. grand jury probing Deutsche Borse unit's ties to Iran bank

Source: Reuters - Tue, 1 Apr 2014 19:50 GMT
Author: Reuters
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By Joseph Ax

NEW YORK, April 1 (Reuters) - A U.S. grand jury is probing whether Deutsche Boerse AG's Clearstream Banking SA unit took any steps to benefit Iran and its central bank, according to a court filing in a case that stems from the 1983 bombing of the U.S. Marine barracks in Beirut.

The grand jury subpoena issued in New York seeks documents related to any property held or any services rendered by Clearstream for the benefit of Iran or its central bank, Bank Markazi. The grand jury is looking at possible violations of money laundering and Iran sanctions laws, according to the subpoena.

A spokesman for Luxembourg-based Clearstream said the bank was aware of the subpoena but had no further information on the investigation.

The filing on Monday came as part of a lawsuit brought by family members of the victims of the Beirut bombing, who won a $2.7 billion judgment against Iran in 2007. The families have accused Iran of providing material support to Hezbollah, which carried out the attack, killing 241 U.S. servicemen.

The lawsuit was filed in 2010 after the U.S. Treasury Department uncovered $1.8 billion in Iranian funds held at Citibank in New York, part of Citigroup Inc.

The complaint named Iran and a number of banks, including Citi, Bank Markazi, Clearstream and Rome-based Banca UBAE, as defendants and sought to have the funds turned over to help satisfy the judgment. The other banks were alleged to have helped Iran hide its control of the accounts and transfer money out of the bank after it was ordered frozen.

The subpoena was served on a lawyer for the plaintiffs and seeks documents they have gathered as part of their lawsuit.

The lawyer, Liviu Vogel, told U.S. District Judge Katherine Forrest in a letter on Monday that he had received the subpoena and intended to comply absent a court order.

Citi did not oppose the plaintiffs' request to have the funds handed over, but Clearstream, Banca UBAE and Bank Markazi all moved to dismiss the lawsuit.

In February 2013, Forrest ruled in the victims' favor and ordered the funds turned over.

The transfer is on hold, however, while Bank Markazi pursues an appeal at the 2nd U.S. Circuit Court of Appeals. Clearstream and Banca UBAE initially appealed before settling with the plaintiffs last year.

In January, in a separate case, Clearstream agreed to pay $152 million to settle U.S. government claims that the banking unit held some $2.8 billion in securities in the United States for Bank Markazi.

The bank said in January that the settlement ended the probe without a formal finding that Clearstream had violated U.S. sanctions laws prohibiting Iran's central bank from any financial dealings with the United States.

The case is Peterson v Islamic Republic of Iran, U.S. District Court for the Southern District of New York, No. 10-4518. (Reporting by Joseph Ax; Editing by Noeleen Walder and Mohammad Zargham)

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